It is mid week and a good time to check in on the EUR/USD. In our weekly forecast we noted on the increased value of the US dollar probably due to risk aversion as a number of mixed and worse than expected figures were released. Looking at the hourly chart above we noted that the EUR/USD has been climbing for the week. Members who have access to Price Action Bias Signals would have seen before the week started that we changed the bias from slightly bearish to neutral. We are pleased to see the currency pair pretty much inline with the Price Action Bias Signals as it eases off from its low last week. 1.13 is a support and resistance region and may be sticky. The middle bollinger band is also in the area and may add its influence in. There should be some resistance pressure to be breached before any bullish momentum can continue.
Risk Aversion Undone
Early week brought better than expected figures for the US Core Retail Sales and US Retail Sales. Instead of of 0.4% and flat, it came in at 0.9% and 0.2% respectively. Stepping back into the green zone versus the previous report definitely adds to the positive sentiments as retail sales is a fundamental indicator of economic health. In view of these and other economic data, it is likely that the risk aversion we saw last week had given way to increased risk appetite. This probably shifted focus to the riskier assets and currencies, adding bearish pressure to the US dollar. We should continue monitoring the remaining economic data releases.
The date of exit for Britain is approaching. With no deal in sight, the voting moves on to the question of whether a delay of Brexit shall be pursued. As this event has considerable impact to the euro zone, we need to be mindful. Any worse or better than expected development has the potential to influence the euro currency.